News Corp.’s The Daily is dead, long live The Daily?

Here endeth chapter one of Rupert Murdoch’s tablet epiphany — News Corporation will stop publishing its The Daily tablet news title from December 15, saying: “Unfortunately, our experience was that we could not find a large enough audience quickly enough to convince us the business model was sustainable in the long-term.”

News Corp. says The Daily will cease as a “standalone”, “though the brand will live on in other channels”: “Technology and other assets from The Daily, including some staff, will be folded into The (New York) Post.”

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In a statement, Rupert Murdoch says: “We will take the very best of what we have learned at The Daily and apply it to all our properties.”

The Daily publisher Greg Clayman is staying to head all digital strategy for the publishing business News Corp is splitting off from its TV and movie operations, while editor-in-chief Jesse Angelo is being upped to The New York Post publisher. Says Murdoch:

“Under the editorial leadership of Editor-In-Chief Col Allan and the business and digital leadership of Jesse, I know The New York Post will continue to grow and become stronger on the web, on mobile, and not least, the paper itself.”

The Daily‘s closure represents the failed end — at least, commercially — to a very worthwhile experiment.

Murdoch was in on the tablet explosion well before the fuse was lit, growing enamoured with Steve Jobs’s vision during iPad’s inception and becoming convinced that hundreds of millions of consumers would buy tablets that could be used to deliver news content to eager readers.

When News Corp. devised The Daily, as iPad’s first tablet-only news title, it was a tacit recognition that existing news brands, already challenged in print, could also be struggling in their digital migration. In launching The Daily, News Corp. was testing the notion that a news publication could leverage old consumer publishing know-how but needed to divorce itself from its print brands’ legacies in order to court an audience of young tablet owners.

But that hasn’t worked. Angelo disclosed in July that The Daily had “over 100,000 paying subs”, renewing at a 98 percent rate. But my former colleague Staci Kramer has previously reported the title was losing $30 million a year and Murdoch had previously said it would take 500,000 subscribers to break even.

What the closure represents is a recognition that it is hard to launch a new news brand with an old model, even on a brand new, sexy device that is nevertheless still on a very attractive growth curve.

What we are seeing is the slow-motion death throes of an obsolete model for selling infinitely replicated content using a pricing model that assume replication is costly.

Current new models like freemium and pay what you want point the way, but we really need to re-invent how we sell content in this new world of infinite replication. Selling apps was just a flash in the pan, with no basis in reality.

As an example of the kind of radical re-thinking that is needed, consider the new view of commerce I have been suggesting called FairPay or Value2Me, that deeply exploits Internet economics and relationhip feedback. This treats content as an experience good, and makes prices correspond to individually perceived Value2Me.